The U.S. Energy Department said on Feb. 28 it is offering up to 6 MMbbl of sweet crude oil from the national emergency reserve in a sale mandated by previous laws to raise funds to modernize the facility.
Laws passed by Congress in previous years require the department to hold sales to pay for improvements to the Strategic Petroleum Reserve which is held in caverns on the coast of Texas and Louisiana.
The delivery period for the oil will be from May 1 to May 14 for oil from the reserve's West Hackberry and Big Hill site, and from May 1 to May 31 from the Bryan Mound site. Offers for the oil must be received by March 13, the department said.
While global oil prices have been rising as the oil production group OPEC and Russia work together to cut supplies, the sale did not appear to be aimed at balancing markets. U.S. Energy Secretary Rick Perry, who has said price impacts from tapping the reserve for supply balance are often temporary, did not mention the sale in a press conference earlier on Feb. 28.
Overall crude oil stocks, not including the U.S. Strategic Petroleum Reserve, fell to 466.6 million barrels from their highest levels in 19 months.
South Korea has been testing Permian light crude as a substitute for Iranian condensate.
Chevron wanted the Pasadena refinery purchased from Petrobras to process sweet crude coming from its oil fields in the Permian Basin of Texas.